Let’s Fix This Financial Crisis

Let’s Fix This Financial Crisis

Fact: The financial crisis began with the housing & lending industry.As the sub-prime industry began to fail, an increased number of houses came on the market through foreclosures and short-sales (Sales where lenders agree to take less than what is owed). This, combined with more restrictive lending practices made it difficult to sell houses. This affects everything – builders, lenders, appraisers, carpet layers, drywallers, bankers, etc. etc. These are the people that buy cars and boats, and games, and TV’s. Hence the waterfall began. The reason that the car industry is hurting is not because we don’t make good cars, it is because PEOPLE ARE NOT BUYING. We can get people buying again, by turning the economy around, not by bailouts, or revamping the car industry. The auto industry is a SYMPTOM, not a CAUSE.

The same holds true for the Banking industry; it is a SYMPTOM, not the cause. The root cause of the financial crisis is the housing industry. Fix that, and the economy will revive. We are concerned that too much money and energy is being focused on fixing the symptoms, rather than the cause. This crisis began with a collapse of the housing industry and it will end with a recovery of the housing industry. WE MUST FIX THE HOUSING INDUSTRY!

Here are 2 Grass Roots ideas that we have come up with (incidentally, we are in the housing and lending industries) that we believe are cost effective and will have a direct affect on improving the housing industry.

1. National Open House Weekend: We believe President Obama should immediately announce and emphatically endorse a National Open House Weekend that would preferably occur this spring, during the time that is normally an upsurge in purchasing. This would be a day when Agents would focus on having open houses and invite lenders to attend and offer special incentives to encourage buyers to act.

2. Government Match of Interest Rate Discount: Use some of the TARP,or Housing recovery funds to encourage lenders to pass on reduced rates to clients by offering to match interest rate discounts below 5%. i.e. if a lender offers a rate of 4.5% (without discount points of course), then the government would match .25% to the lender. If a lender offers 4%, then the government would chip in .5%.